\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 702 Shede Spirits Co.Ltd(600702) )
Matters:
Shede Spirits Co.Ltd(600702) released the performance report for 2021. In 2021, the company achieved an operating revenue of 4.969 billion yuan, an increase of 83.8% year-on-year; The net profit attributable to the parent company was 1.246 billion yuan, a year-on-year increase of 114.35%; The non net profit attributable to the parent company was 1.211 billion yuan, a year-on-year increase of 120.89%; The basic earnings per share was 3.78 yuan, a year-on-year increase of 116.74%.
Ping An View:
21 years ended smoothly and the Spring Festival of 22 years started well. In 2021, the company achieved an operating revenue of 4.969 billion yuan, a year-on-year increase of 83.8%, and its operating performance increased significantly compared with the same period of last year; The net profit attributable to the parent company was 1.246 billion yuan, with a year-on-year increase of 114.35%. The whole year ended smoothly, and the performance was in line with expectations. The company achieved the annual target ahead of schedule. In the fourth quarter, in order to control the sales rhythm, stop delivery and sort out channel inventory, 21q4 achieved an operating revenue of 1.362 billion yuan, a year-on-year increase of + 44.89%; The net profit attributable to the parent company was 276 million yuan, a year-on-year increase of + 2.12%. According to the company’s pre increase announcement in the first quarter, during the Spring Festival of 22 years, the company was willing to continue the high growth trend, and the dynamic sales achieved a good start. It is expected that the revenue in the first quarter will increase by 80% year-on-year and the net profit will increase by 52% – 85% year-on-year.
Old wine strategic brand empowerment, multi price belt go hand in hand. In 2021, the company continued to promote the old wine strategy and dual brand strategy, and its product quality was further recognized by consumers. Its liquor products achieved a revenue of 4.577 billion yuan, a year-on-year increase of 94.8%. In terms of products, the company’s medium and high-grade wine revenue increased by 81.9% year-on-year to 3.874 billion yuan, and the low-grade wine revenue increased by 218.7% year-on-year to 703 million yuan. Under the brand benefit, all price bands have achieved rapid growth; The revenue of glass bottles increased by 6.6% year-on-year to 357 million yuan. In terms of channels, the company’s e-commerce channel achieved a revenue of 402 million yuan, a year-on-year increase of 129.4%; The revenue from wholesale channels was 4.175 billion yuan, a year-on-year increase of 91.98%.
Nationwide channel layout and quality improvement increment of dealers. In terms of regions, the company realized a revenue of 1.179 billion yuan in the provincial market in 2021, with a year-on-year increase of 127.57%; The revenue from markets outside the province was 2.995 billion yuan, a year-on-year increase of 80.82%. During the reporting period, the company continued to promote the nationwide channel layout and build core terminals, with a net increase of 491 to 2252 dealers. According to the channel research, given the stable contribution of old dealers, the company will continue to promote the investment promotion coverage of blank markets and the sinking of channels in mature markets, and adopt the survival of the fittest system to realize the increment of quality improvement. In 2022, the company will assess the independent operation of Tuopai and shede business division, actively attract investment for T68 contour light bottle wine, and steadily promote the national layout.
Structural optimization, cost improvement and steady progress in profitability. The gross profit margin of the company’s sales in 2021 was 77.85%, which was + 1.94 PCTs compared with the same period of the previous year, mainly due to the increase in the proportion of alcohol structure; The management expense ratio of the company was 12.14%, compared with -0.42pcts in the same period of the previous year; The sales expense ratio was 17.63%, compared with -2.23 PCTs in the same period of the previous year. Under the dual effects of the increase of gross profit margin and the improvement of expense rate, the net profit margin of the company in 2021 was 25.57%, which was + 3.11pcts compared with the same period of the previous year. In the future, the company will continue to promote the old wine strategy, promote the further improvement of the company’s profitability through product structure upgrading + price increase of main products and fine investment of superimposed expenses.
21 years ended smoothly and maintained the “recommended” rating. The company ended successfully in 21 years and made a good start in 22 years, which shows that the channel strategy of the company under high cost investment has achieved remarkable results, and the company actively controls the benign channel of goods, maintains the rational growth goal, and will continue to enjoy the expansion dividends of secondary high-end and old wine in the future. We adjusted the profit expectation. The EPS forecast from 2022 to 2024 is 5.66, 8.01 and 10.68 yuan (the original forecast from 2021 to 2023 is 3.85, 5.74 and 7.58 yuan), maintaining the “recommended” rating.
Risk hint: 1) Baijiu industry downturn risk. Baijiu industry boom and price trend is highly correlated, if Baijiu prices decline, may cause the enterprise revenue growth slowed sharply. 2) The change of management may easily lead to business fluctuation risk. Baijiu enterprises are influenced by business strategies, such as changing management level, which may lead to a sharp fluctuation in revenues and profits. 3) Policy risk. Baijiu industry demand and tax rate are greatly influenced by policies, such as changes in relevant policies, which may have a greater impact on the company’s revenues and profits.
